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Wired or Mired? Electronic Information for the Gas Industry

Fortnightly Magazine - February 1 1996

gas as a commodity requires greater standardization of contractual provisions, rights, and responsibilities. Standardized gas-related information must flow rapidly and seamlessly across tightly integrated networks so trading partners can make informed decisions and execute transactions quickly and

effortlessly.

We have a physical infrastructure for efficient gas commodity markets: a nationwide grid of interstate and intrastate transmission pipelines and storage fields linked to production areas. Market centers are developing at the key intersections along this transmission grid. An effective electronic information infrastructure is necessary to realize the efficiencies created by these physical production, transportation, and marketing facilities.

Success stories from other industries demonstrate that traditionally "low-tech" industries can create comprehensive electronic information networks when faced with competition. Consider the global banking system. Founded on brick-and-mortar branches, local franchises, and laborious ledger bookkeeping, banking now extends a vast electronic web that transcends national borders. Digital money brings the latest in electronic financial services to customers far removed from the world's largest companies and cities.

In the trucking industry, information systems "masquerade" as freight lines. Satellite-linked long-distance trucks with onboard computers are dispatched across the interstate highway system from central control centers with "precision logistics" supplied by advanced expert software. If industries as diverse as banking and trucking can integrate and coordinate their operations electronically, the gas industry should be able to do so as well.

A Warning Shot

Across the Bow

On September 21, 1995, various industry representatives reported at the FERC's request on the current state and future role of electronic information in the gas industry infrastructure. Shippers, which must "navigate" multiple EBBs, complained that interstate pipelines have no common set of information requirements other than those that GISB has helped establish. (For any business transaction, pipelines require from 13 to more than 30 data elements.) The representative of the Process Gas Consumers Group described the situation succinctly: "Someone not full-time in the natural gas industry has a hell of a time keeping on top of the EBBs."2

Attendees also indulged in much finger pointing and discussion over the slow pace by which information standards for essential gas transactions are developing. The FERC's patience on the pace of efforts to simplify and standardize is clearly wearing thin. Chair Elizabeth A. Moler asked repeatedly whether the FERC needs to do more to improve existing systems. She opined that waiting several more years for development "would be death" for the industry. FERC Commissioner Donald F. Santa, Jr. warned that the gas industry may forfeit market share if it cannot solve its problems. Santa pointed, in particular, to the progress the electric power industry has made in developing real-time information systems (RINs): "If that's not a warning shot across the bow of the natural gas industry, I don't know what is."

The natural gas industry has much to do before it can fulfill its destiny in the information-intensive electronic marketplace for energy now underway. The key players in this effort must

not wallow in the thousands of industry-specific EBB and electronic data interchange (EDI) implementation details and lose sight of the big picture. The EBB Working